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Financing Difficulties Cause Yearlong Delay for a $15 million
 127-room Cambria Suites in Roanoke, Virginia
By Jenny Kincaid Boone, The Roanoke Times, Va.McClatchy-Tribune Regional News

Apr. 27, 2008 - Though financing difficulties have caused a nearly yearlong delay, developers still expect to bring a new lodging brand to Roanoke -- a $15 million facility with a towered lobby and a curved pad.

Developers said last week they secured additional funding and planned to resume construction soon, but by midday Thursday, nothing had happened on the site of the 127-room Cambria Suites. The project abuts one end of Carilion Clinic's Riverside Center for Research and Technology on Reserve Avenue.

The planned hotel's 6-acre site has sat dormant for 11 months, with a steel frame and a slab of concrete the only evidence of previous progress.

In 2006, Telemark Hotel Group announced plans to raise the Cambria Suites, a new Choice Hotels International brand, with the expectation that it would open in 2007. Telemark purchased the property in 2006 from Carilion Clinic. The city already had paid $3.2 million to ready the land for development.

But a partner with Telemark, Ryan Eller, said last year that his company needed more money to finance the project, because the area is in a flood plain.

The hotel's structure would have to be raised on a platform to make room for a parking garage underneath, work that would be costly, the company determined.

In September, after requests from Telemark for financing help, the Roanoke City Council agreed to grant the company $1 million in tax rebates. The agreement states that Telemark can receive half of the amount of real estate and occupancy tax revenue generated in a year if the hotel produces $275,000 or more and opens by September 2009.

Eller said last week in a phone interview from his Dallas office that Telemark recently finalized project funding that has caused the construction delays, he said. Since September, several dates have been slated for construction to resume, yet nothing has happened.

Apparently, Telemark's previous lender pulled out of financing the project last year, when "the credit markets tightened up," Eller said.

"I've been working on this since September," he said. "We were all thinking this would be done in February."

Eller would not disclose the amount that Telemark is borrowing.

HomeTown Bank of Roanoke is lending Telemark $3 million, its legal limit, said Warner Dalhouse in February. Dalhouse is one of 16 investors in the Cambria Suites project, and he is chairman of HomeTown Bank.

A Dallas bank is providing the rest of the funding, but Eller would not disclose its name.

He said construction work initially will involve clearing off rust on steel frames at the hotel site and building the parking garage. After that, "we will smoothly transition into the hotel level," he said.

It should take nine to 12 months to complete the Cambria Suites and open it for business.

Brian Townsend, assistant city manager for community development, said the city is anticipating a December 2008 to January 2009 opening for the new hotel.

The process, Eller promised, "should be more of steady progress, moving forward at this point."

But Cambria Suites will take up only 2.25 acres of Telemark's property. That leaves 3.9 acres of grassy property that still is vacant, with no signs of future work there.


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Copyright (c) 2008, The Roanoke Times, Va.

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